Get that money through Direct Deposits
About 75% of our patients have dental insurance. After they visit us, we send a claim for services rendered to their dental insurer. Based on a combination of policy provisions (e.g. deductible, coinsurance, clinical rules) and fee schedule (i.e. in-network vs. out-of-network), the dental insurer will pay us. Usually, the insurer payment process takes 7 - 14 days (not including mail time).
There are three ways a dental insurer can pay a provider: (1) check; (2) virtual credit card; and (3) direct deposit (sorry crypto enthusiasts - no Bitcoin or Ethereum payment modalities yet). When Jamie and I bought the practice in April 2021, out payment receipt percentages were approximately 90% check, 10% virtual credit card, and 0% direct deposit.
This posed a couple problems…
First, while I’m an ardent supporter of the United States Postal Service (USPS), I don’t like relying on them to manage my revenue cycle. Mail takes time (and is taking more time) to get from point A to point B. The USPS states that 70% of first class mail has a 1 - 3 day delivery time period. That’s not terrible. But it’s not instantaneous. And if we can shrink the revenue cycle timeline, we will. Checks come through the mail. Virtual credit card payments come through the mail. More mail = more delays.
Second, assuming the mail gets to the office, it’s a physical piece of paper! Paper is delicate. It can be ripped, stained, lost among the shuffle, made illegible, and so on. We had to spend a bunch of administrative effort to to ensure the money made its way to our business bank account and any explanations of payment (EOP) made it into the patient record in Dentrix Ascend. Additionally, for checks, we had to either remote deposit them (admin effort) or take them to the bank (admin effort). Finally, for virtual credit cards, we had to manually enter them into our credit card terminal (admin effort). I mentioned the words “admin effort” four times in that paragraph. I hate unnecessary admin effort. It takes time away from the more critical tasks that actually help our patients and our business.
Third, we paid a fee for virtual credit card payments. Fees increase overhead, eat into the bottom line, and take money away from key investments we want to make into this business to improve the care we deliver to our patients.
So what did we do?
We shifted (to a maximal extent) our defined payment preferences from check/credit card to direct deposit. It’s a simple idea that required a lot of up-front work with a number of different dental insurers to make the transition. For example: BlueCross BlueShield of Illinois partners with Zelis for direct deposit payments. United Healthcare and MetLife also partners with Zelis but through a different mechanism. Humana, Cigna, Guardian, and Delta Dental carriers all have their own proprietary direct deposit systems that require individual registration processes. Other insurers like GEHA and Principal use a 3rd party called Echo to administer direct deposits. It’s a complicated ecosystem that required diligence and patience to navigate. But after a year, we successfully transitioned (to the extent that we could) all insurer payments to direct deposits. That transition has resulted in: (1) more timely payments; (2) reduced administrative effort; and (3) reduced fees. And we’re a better business for it.